The need for states to identify and appropriately fund the special needs of the small/rural community college is discussed in terms of eight issues: (1) certain costs which are required for operation of institutions regardless of size and which are unrelated to programs (e.g., library, grounds maintenance, meeting recommendations of accrediting agencies, employee fringe benefits, and costs due to state and federal regulation) should be funded totally by the state; (2) the need to rethink state responsibility to public compared to private institutions; (3) state support to assure adequate access to low tuition community college programs; (4) provision by the state allowing colleges to provide free community service activities; (5) special attention by the state to the added costs of equipment and facilities for occupational programs; (6) state legislative appropriations for college captial purposes; (7) extent of state funding of two-year programs in four-year institutions; and (8) consideration of future unknown factors. A discussion of the current four types of state-level support for colleges--negotiated budgets, unit rate formulas, minimum foundation funding, and cost-based program funding--points out their deficiencies, and is followed by a discussion of the four capital funding models--state financed, locally financed, state/local cost sharing, and foundation programs. (MB)